Taxation in North Carolina

North Carolina imposes an excise tax on tobacco products other than cigarettes on the wholesale dealer or retail dealer who first acquires or otherwise handles tobacco products subject to the tax. A wholesale dealer or retail dealer who brings a tobacco product into North Carolina or is the original consignee of a tobacco product that is made elsewhere and shipped into North Carolina is considered the first person to handle the tobacco product. A retail dealer who acquires non-tax-paid tobacco products subject to the tax from a wholesale dealer is liable for any tax due on the products. A manufacturer who is not a retail dealer and who ships tobacco products to either a wholesale dealer or retail dealer may apply to the Secretary of Revenue to be relieved of paying the tax.

The tax rate for tobacco products other than cigarettes is 12.8% of the cost price of the products, meaning the price a person liable for the tax paid for the products, before any discount, rebate, or allowance.

Wholesale and retail dealers liable for the excise tax on tobacco products other than cigarettes must file the Monthly Other Tobacco Products Excise Tax Return (Form B-A-101) and the Tobacco Report Tax-Paid Products of Nonparticipating Manufacturers (Form B-A-7) within 20 days after the end of each month, even if no tax is due.

A “wholesale dealer” is either: (1) a person who acquires tobacco products other than cigarettes for sale to another wholesale dealer or to a retail dealer; or a manufacturer of products other than cigarettes.